Getting back to business: Business resumption during COVID-19

I have been involved in pandemic planning for many years—sat on Canada’s Pandemic Preparedness Team and represented Canada at the Asian Pacific Economic Cooperative as a pandemic preparedness expert. Studying pandemics and the effects on society over the years was always theoretical, the “what ifs” in nature, and it all just seemed like science fiction rather than reality. I remember a conversation I had with Dr. Ross Uphsur, former Director of the University of Toronto Joint Centre for Bioethics, when he said, “It’s is not about if a pandemic will come, it is about when it will come.” That “when” is now. And yet it still feels like science fiction; the rapid and extreme changes to our society are truly surreal.

Sadly, the pandemic is very real, but we take solace in knowing we are all in this together. The Sprott School of Business is dedicated to investing in the youth of tomorrow, supporting social enterprises, and the faculty and students are continuously working with local businesses to provide advice and guidance. This time of crisis is no different for the Sprott team as we face, head on, these difficult and unprecedented times. Our team continues to provide support and guidance for businesses and society alike.

The COVID-19 virus has taken a toll on both human health as well as on economies around the world and the mobilization of strategies and solutions to mitigate the effects is both remarkable, yet truly novel. This pandemic has forced so many societies to navigate through unchartered waters—untapped areas of social and economic uncertainties our generations have yet to experience. The impact to businesses, both large and small, is profound, with many struggling to survive, while others have pivoted and retooled their business lines to provide help and gain much needed revenue to keep the lights on and their people employed. It’s a long road ahead before life can resume to any level of normalcy and so it’s essential that businesses look ahead and focus on how to keep the boat righted, steady, and on course.

For business owners, the focus now is on resumption of their business and what that will look like during and post-COVID-19. But certain questions loom: When will further restriction lift and full resumption be possible? How can businesses reopen safely? Important questions, yet small and medium enterprises may not have the resources to create elaborate plans for resumption. They should, then, consider several factors, including operational expenses, the importance of their product lines or services, and understand how customer behaviours have changed.

Think about reopening your business gradually

While business owners are eager to restart, they may face issues if they try to return to normal too fast. Operational expenses will quickly climb with increased expenses in utilities, salaries, and inventory, along with new expenses like buying PPEs, signage, and safety equipment. Moreover, some types of businesses may find that the supply chain is not at full capacity as suppliers are also struggling with reopening. Restarting too fast without pre-COVID-19 levels of revenue coming in will place a business in further financial trouble. In Toronto, more businesses went insolvent in the post-SARS epidemic than they did during the epidemic. This was, in part, due to the attempt to resume business “as usual” while customers were still not willing to risk going out. This was particularly felt in the travel, retail, and entertainment industries. Many restaurants reopened only to find their tables empty. The City of Toronto did initiate a tourist campaign called “Time for Toronto” which helped to bring people back to the city and assist local businesses in staying afloat until people felt it was safe to go out again. We will see similar local municipal programs post-COVID-19 that will help bring revenue back to the business community during these much-needed times. Yet, as consumers, we have to be mindful that every municipality in the country will be doing the same. So, it is encouraged to buy within your own community to help the local economies recover. For business owners, opening slowly may be the best options. Restarting a business after a crisis should be like turning a dimmer switch on a light: turn it on slowly and steadily while preparing to dim it back if you think it is too bright. In the coming months, the economy will experience a slow revenue build, so business owners should be prepared to be flexible and responsive in preparing.

Do what makes sense for your business: start with your most relevant products or services

Every business owner should be thinking about their core business and what they do best. Concentrate on the key business your customers will want first. If you are providing a service, then give your best key service, then slowly reintroduce your “value added” services. If you provide products, consider your most popular or known product lines and then add your fringe product lines when it makes sense to do so. As more cautious customers venture back into the market, it is important to think about customers’ needs. Customers will prioritize their purchasing power in the early stages of resumption by seeking out products and services they need more than products they want. For example, hair salons will be popular for haircuts, yet customers may not buy specialty hair products because they don’t have the same level of disposable income. For businesses that have pivoted to create new delivery models or alternate sales methods, they should consider maintaining these strategies during the resumption phase and, if it makes sense, after. For example, distilleries who began making hand sanitizers may want to keep manufacturing these supplies and consider reintroducing their other products gradually.

Understand customers will be cautious

There is no crystal ball to predict how long this virus will be around or how long restrictions will be in place, so it is important for business owners to prepare to reopen by understanding their business lines and their customer needs and behaviours. Moreover, it is important to remember that your customers will come back, but it may not be right away. Put yourself in the shoes of your clients. We all hear about the “new normal” where people have become accustomed to social distancing, staying home, and avoiding any unnecessary outings. This “new normal” will not simply end when COVID-19 dissipates as fears about contracting or spreading COVID-19 persist. People will continue to be cautious, and it will take time before they resume back-to-normal activities. This unsettled consumer behaviour may last months, so for businesses depending on customers coming to their establishments, consumer uncertainty can have a significant impact on their financial wellness. It’s prudent then, that business owners be patient, but adjust business strategies to effectively mitigate losses and increase the chances of weathering the storm.

We all need to prepare for a gradual return of business and societal normality; understanding that it will take time for both consumers and businesses to regain their footing in a post-COVID-19 world. As well, we need to continue to be compassionate and remember, we are all in this together. Dealing with this pandemic is like running a marathon, it’s not a sprint, so it is important to keep a steady pace in order to make it to the finish line.